Correlation Between DOCDATA and CITIC Securities

Can any of the company-specific risk be diversified away by investing in both DOCDATA and CITIC Securities at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining DOCDATA and CITIC Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DOCDATA and CITIC Securities, you can compare the effects of market volatilities on DOCDATA and CITIC Securities and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in DOCDATA with a short position of CITIC Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of DOCDATA and CITIC Securities.

Diversification Opportunities for DOCDATA and CITIC Securities

-0.41

Correlation Coefficient

DOCDATA  CITIC Securities

Very good diversification

The 3 months correlation between DOCDATA and CITIC is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding DOCDATA and CITIC Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Securities and DOCDATA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on DOCDATA are associated (or correlated) with CITIC Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Securities has no effect on the direction of DOCDATA i.e., DOCDATA and CITIC Securities go up and down completely randomly.

Pair Corralation between DOCDATA and CITIC Securities

Assuming the 90 days trading horizon DOCDATA is expected to generate 11.25 times less return on investment than CITIC Securities. In addition to that, DOCDATA is 1.3 times more volatile than CITIC Securities. It trades about 0.02 of its total potential returns per unit of risk. CITIC Securities is currently generating about 0.24 per unit of volatility. If you would invest  203.00  in CITIC Securities on April 24, 2025 and sell it today you would earn a total of  91.00  from holding CITIC Securities or generate 44.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

DOCDATA  vs.  CITIC Securities

DOCDATA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DOCDATA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, DOCDATA is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

CITIC Securities

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC Securities are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CITIC Securities reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DOCDATA and CITIC Securities

The main advantage of trading using opposite DOCDATA and CITIC Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DOCDATA position performs unexpectedly, CITIC Securities can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CITIC Securities will offset losses from the drop in CITIC Securities' long position.

The idea behind DOCDATA and CITIC Securities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.